Abby Owns a Condominium in the Great Smokey Mountains Using the IRS Method of Allocating Expenses,the Amount of Depreciation

question 108

Multiple Choice

Abby owns a condominium in the Great Smokey Mountains.During the year,Abby uses the condo a total of 21 days.The condo is also rented to tourists for a total of 79 days and generates rental income of $12,500.Abby incurs the following expenses: $$\begin{array} { | l | r | } \hline \text { Expense } & \text { Amount } \\\hline \text { Mortgage interest } & \$ 4,100 \\\hline \text { Property taxes } & 1,900 \\\hline \text { Utilities } & 2,200 \\\hline \text { Insurance } & 1,200 \\\hline \text { Depreciation } & 10,000 \\\hline\end{array}$$ Using the IRS method of allocating expenses,the amount of depreciation that Abby may take with respect to the rental property will be

• A)$5,074.
• B)$8,515.
• C)$7,900.
• D)$10,000.

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